Blackstone to buy Strategic Hotels in $6 billion deal

Strategic Hotels' properties include the Four Seasons Washington, D.C. on Pennsylvania Avenue, the Westin St. Francis on Union Square in San Francisco and the beach-front Ritz-Carlton Laguna Niguel in Orange County, CaliforniaReuters | September 09, 2015, 08:19 IST

Blackstone will buy real estate investment trust Strategic Hotels & Resorts in a deal valued at $6 billion, attracted by the company's iconic hotel properties in key locations of the United States. Blackstone Group LP will buy real estate investment trust Strategic Hotels & Resorts in a deal valued at $6 billion, attracted by the company's iconic hotel properties in key locations of the United States.

Strategic Hotels' properties include the Four Seasons Washington, D.C. on Pennsylvania Avenue, the Westin St. Francis on Union Square in San Francisco and the beach-front Ritz-Carlton Laguna Niguel in Orange County, California.

The company's shares rose to as much as $14.10 on Tuesday, just below the offer price of $14.25 per share.

Blackstone shares rose as much as 4.5 percent to $35.17.

"There are buyers who are looking for more than just economic returns and might be willing to pay a lot more (for each of Strategic Hotels' properties) than what Blackstone paid for the whole portfolio," Canaccord Genuity Inc analyst Ryan Meliker told Reuters.

Blackstone has been on a property buying spree, snapping up everything from single-family homes in the United States to distressed commercial real estate in Europe.

Real estate overtook private equity as Blackstone's most high-profile and lucrative business in 2014, accounting for 43 percent of its economic net income in the year.